‘Not the outcome I wanted’: Boehner

Boehner said he was not concerned that Thursday’s withdrawn vote threatened his position as House speaker.
Photo: Reuters

by
Thomas Ferraro and Rachelle Younglai

House of Representatives Speaker John Boehner said on Friday congressional leaders and President Barack Obama must try to move on from Republicans’ failed tax plan and work together to avert the looming US “fiscal cliff".

Boehner, the top Republican in Congress, was unrepentant at a Capitol Hill news conference the day after the stunning failure of his “Plan B" option, a development that raised doubts about his own leadership and left negotiations in disarray.

The failure cast fresh uncertainty over talks to avoid roughly $US600 billion in across-the-board tax hikes and automatic government spending cuts due to begin in January that could push the US economy back into recession in 2013. This combination of tax hikes and spending cuts is known as the “fiscal cliff."

It was “not the outcome I wanted," Boehner said after he was unable to muster enough Republican support in the House for a plan that would have limited income-tax increases to only the wealthiest sliver of the population - those earning $US1 million and more.

Boehner, Obama’s chief negotiating partner in talks seeking a bipartisan “fiscal cliff" solution, said he was not concerned that Thursday’s withdrawn vote threatened his position as House speaker. He did not outline a clear path forward on negotiations.

The speaker failed to control unruly conservative fellow House Republicans who adamantly oppose raising taxes on anyone. They delivered a stinging rebuke to Boehner by refusing to back his “Plan B" approach.

Boehner said a divided Washington must come together to revamp the massive US tax code in a way that helps spur economic growth. “How we get there, God only knows," he said.

Stocks dropped sharply at the open of trading, one day after Boehner’s bill was put on the shelf.

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Investors have been increasingly optimistic that a deal would be worked out before the end of the year, but this has changed that equation. Major indexes lost more than 1 percent, though stocks are still higher for the week, suggesting investors still hold out hope that an agreement will be brokered in Washington.

‘SEE YOU LATER’

Boehner had hoped to use the Plan B option to pressure Obama in “fiscal cliff" talks. But late on Thursday he abruptly pulled the legislation. House members, heading to their home states for the holidays, were instructed to be available on 48 hours notice if necessary.

“They went from Plan B to plan see-you-later," Obama adviser David Axelrod said on MSNBC on Friday morning.

Obama said he still plans to work with Congress and was hopeful for a bipartisan solution, his press secretary said in a statement late on Thursday. The House is controlled by Republicans and the Senate by Obama’s fellow Democrats.

The crumbling of Boehner’s plan highlights his struggle to lead some House Republicans who flatly reject any deal that would increase taxes on anyone.

Republican Representative Tim Huelskamp criticised Boehner’s handling of the negotiations, saying the speaker had “caved" to Obama opening the door to tax hikes. Huelskamp, a dissident first-term congressman, said he was not willing to compromise on taxes even if they are coupled with cuts to government spending sought by conservatives.

Conservatives “are so frustrated that the leader in the House right now, the speaker, has been talking about tax increases. That’s all he’s been talking about," Huelskamp said on MSNBC on Friday morning.

“There’s been very little outreach by this leadership team to conservatives. ... Do not ask for tax increases. We’re not going to give them," Huelskamp said, added: “We can still get this done."

Obama and his fellow Democrats in Congress are insisting that the wealthiest Americans pay more in taxes in order to help reduce high federal budget deficits and avoid deep spending cuts.

SENATE LEGISLATION

Democrats are now stepping up efforts to gather some Republican votes for a Democratic bill passed by the Senate months ago that would extend the expiring tax cuts to all but the wealthiest Americans.

“What we’ll have to do is figure out where that line is that gives us those 218 votes" needed to garner a majority of the House behind legislation, Republican representative Michael Burgess said on CNBC on Friday.

Senate Republican Leader Mitch McConnell, who has experience helping to forge deals when House Republicans are in disarray, is likely to play a larger role now in attempting to rescue the situation along with other Senate Republicans, who have been more receptive to compromising.

Wall Street and numerous chief executives have expressed frustration with Washington and the wrangling over a deal that has persisted for weeks with little progress.

Aetna chief executive officer Mark Bertolini said he feels negotiations seem like they are falling apart, calling the back-and-forth among politicians “pitiful and embarrassing" in the Wall Street Journal on Friday.

Sean West, a Eurasia Group analyst, told Reuters: “Boehner didn’t have a ton of good moves, and has even fewer now." He said he thought Boehner was “either headed back to the White House for a big deal or he’s accepting whatever bipartisan fallback is crafted by Senate leaders. Hard to see him coming back with another partisan gambit."